Chandigarh’s excise department misses revenue target by ₹36-cr: CAG audit
The CAG report also stated that the department has consistently failed to meet its targets since 2019-20 financial year
An audit report of the Comptroller and Auditor General of India (CAG) has pointed out that the excise and taxation department has failed to achieve its target of ₹900 crore for the 2022-23 financial year, missing the mark by ₹36 crore. The CAG report also stated that the department has consistently failed to meet its targets since 2019-20.
The excise and taxation department, a revenue-generating arm of the administration, is headed by the assistant excise and taxation commissioner, who oversees the office through the excise and taxation officer (state excise). The finance secretary, UT, Chandigarh, also serves as the secretary of the excise and taxation department, which is a significant contributor to the exchequer.
The report was acquired by RTI activist RK Garg under the RTI Act.
Garg emphasised that the UT administration should take the audit objections seriously, as such lapses are resulting in substantial financial losses.
A senior official of the UT excise department said: “The revenue shortfall was due to competitive excise policy in Punjab and the relocation of businesses to neighboring towns like Mohali and Panchkula. Also, the high license fee in Chandigarh for the year 2022-23 discouraged bidders, leading to a poor response for liquor vends and a subsequent revenue deficit.
Non-achievement of revenue receipt targets
The report stated that the UT administration had set a revenue receipt target of ₹900 crore for the excise and taxation department in 2022-23. However, the department only managed to collect ₹863 crore, resulting in a shortfall of ₹36 crore.
Non-realisation of establishment charges
The report pointed out that under Section 13 of the Punjab Distillery Rules, 1932, licensees are required to allow the posting of a government excise establishment in their distilleries to ensure compliance with the rules. Section 16 further mandates that licensees deposit payments into the government treasury to cover the salaries of the posted excise personnel. A test check of records revealed that an excise inspector was posted in distilleries under the jurisdiction of AETC/ETO excise, Chandigarh, for this purpose. However, establishment charges amounting to ₹1.05 crore for the years 2018-19 to 2022-23 were not recovered from the concerned distilleries. This includes ₹38 lakh for 2018-19 to 2022-23 and ₹67.22 lakh as noted in paragraph 3 of the local audit report for 2018-19. The AETC/ETO (state excise), Chandigarh, failed to raise the demand for these dues as required by the rules.
Short deposit of cow cess
The department imposes cow cess at a rate of ₹5 per 750 ml bottle of country liquor, ₹5 per bottle of beer, and ₹10 per 750 ml bottle of whisky. This amount is to be deposited by wholesale licensees in a dedicated civic body account. However, the report revealed that ₹19 lakh in cow cess was short-deposited by wholesalers.
